Losing the Signal, Story of Fall of BlackBerry Ltd (BBRY), Author Thinks Company still “Has a lot of Gas Left”
Very few people would have thought of BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) returning to profitability after years of losses and uncertainty that threatened its existence. Even John Chen, when newly appointed had indicated that there was a 50-50 chance that the turnaround plan would work. Speaking to CNBC, Globe and Mail Senior writer, Jacquie McNish, reiterated that the first phase of the turnaround has been successful but still there is a lot to be done. She discussed the fall of BlackBerry and her belief that the current company still has a lot of gas left in the tank.
BlackBerry’s Ignorance Lead to Downfall
McNish mostly talked about failures of the past and discussed how failure to think outside the box was BlackBerry biggest undoing when it commanded a huge market share in the space.
BlackBerry’s failure to acknowledge Apple’s threat in the early stages of smartphones renaissance was its biggest undoing, according to McNish.
“Mike Lazaridis looked at the iPhone took a part and said they have put a Mac in this, there’s no way that the network is going to be able to handle this. He was right for the first year, but what RIM got wrong was that Steve Jobs had a multiyear contract with AT&T,” said Mrs. McNish
Networks in the early 2000’s were extremely primitive marred with limited bandwidth capacity. BlackBerry Ltd (NASDAQ:BBRY) failed to acknowledge the fact that things could change as wireless companies started to invest a improving their network. AT&T Inc. (NYSE:T) backed by an exclusive deal with Apple Inc. (NASDAQ:AAPL) reinvented bandwidth making the network’s faster. Faster network gave iPhones an opening to rival Blackberry’s monopoly of the industry.
Effects of competition on the smartphone space were evident as BlackBerry saw its earnings come under immense pressure from iPhones and Samsung Galaxy. The company had nowhere else to run to, other than turn to an outsider who could challenge internal thinking and set the company on a recovery path, away from the clutches of bankruptcy.
Long Road Ahead But Gas Left in the Tank
Everything is now looking good for BlackBerry Ltd (NASDAQ:BBRY). The company is now generating cash and has become profitable once more. The next phase according to Chen is generating more revenue and profit, and being able to sustain it for long.
The software business based on security and privacy remains the company’s biggest hope moving forward. BlackBerry Ltd (NASDAQ:BBRY) is banking on long-term deals signed with big corporations and government installations. The turnaround is going well, and BlackBerry Ltd (NASDAQ:BBRY) can only get better affirms McNish.
“I think there is a lot of gas left in the tank it is a $3 billion company now. The thing I would say that a lot of people don’t really understand is that they have the security of long-term investors. They’ve got Prem Wasta at Fairfax; they’ve got Prime Cap in California,” said Mrs. McNish.
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